The well-known association between height and earnings is often thought to reflect factors such as self esteem, social dominance, and discrimination. We offer a simpler explanation: height is positively associated with cognitive ability, which is rewarded in the labor market. Using data from the US and the UK, we show that taller children have higher average cognitive test scores, and that these test scores explain a large portion of the height premium in earnings. Children who have higher test scores also experience earlier adolescent growth spurts, so that height in adolescence serves as a marker of cognitive ability.

The well-known positive association between health and income in adulthood has antecedents in childhood. Not only is children’s health positively related to household income, but the relationship between household income and children's health becomes more pronounced as children age. Part of the relationship can be explained by the arrival and impact of chronic conditions. Children from lower income households with chronic conditions have worse health than do those from higher-income households. The adverse health effects of lower income accumulate over children’s lives. Part of the intergenerational transmission of socioeconomic status may work through the impact of parents' income on children’s health.

Health and wealth are the two most important components of well-being. Rankings of well-being based on income will differ from more comprehensive rankings depending on the way that income and health are related. There are strong bidirectional causal links between income and health so that we cannot understand either without understanding both. What we call the ?wealthier is healthier? hypothesis asserts both that income is the main determinant of health, and that the international correlation between income and health is sufficiently tight for income rankings to indicate well-being more broadly.

Wealthier people live longer and experience less morbidity than do poorer people, in both developed and developing countries. While the association between income and health status has been well documented, the mechanisms leading to this correlation are unclear. In this paper, we use data collected from an informal urban township in South Africa to examine the extent to which compliance with medical protocols plays a role in the observed income-health gradient. Specifically, we look at adherence to protocols among individuals diagnosed with hypertension.

Household Resource Allocation in Stepfamilies: Darwin Reflects on the Plight of Cinderella by Anne Case, I-Fen Lin and Sara McLanahan. Published in volume 89, issue 2, pages 234-238 of American Economic Review, May 1999